Income Tax

Unpaid income tax can be stressful. Many people are unsure of what to do when they haven’t filed their taxes or paid what is owing. And dealing with the Canada Revenue Agency (CRA) on your own can be intimidating, especially since the CRA can withhold HST and child tax credits, seize money in your bank account, and garnish your wages. They can also continue to charge penalties and interest on the money you owe until your debt is paid in full.

You might be surprised to learn that unpaid taxes actually represent a considerable amount of the debt that many have. If you have not filed your tax returns as required, you do have options for repaying this debt.

What can I do to repay my income tax debt?

The first step you can take is to gain a better understanding of your tax debt situation. This can be done by completing and submitting all outstanding tax returns. It might seem overwhelming, but once you can see exactly what you owe, you will be better prepared to decide how to manage your debt.

Review your past returns to make sure you are taking advantage of all the possibilities to reduce what you owe.

If the reason you couldn’t pay your tax debt was because of events beyond your control, like a serious illness, natural disaster, or loss of employment, you may apply for tax relief provisions and see if you qualify to have penalties or interest cancelled or waived.

What if I can’t afford to repay my tax debt?

If you can’t afford to repay your current debt, you have options available for relief:

It may be possible to negotiate with the CRA about the amount of tax you owe by filing a consumer proposal. Our local debt professionals will assess your situation and create a payment plan that is practical for you and acceptable to the government. Read more about how a consumer proposal could be right for you by visiting our Consumer Proposals page.

If you have determined that you can’t pay your tax debt to the government, you might consider filing for bankruptcy. Our Licensed Insolvency Trustees (LIT) can review your case and confirm that your tax liability will be discharged if you choose to file for bankruptcy.

You may request a call at any time and have one of our local LITs review every one of your options to repay your tax debt and provide an assessment of your financial situation for free, with no obligation.

BDO OTTAWA

INSOLVENCY DEBT CONSOLIDATION & BANKRUPTCY

BDO Canada Limited is an affiliate of BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO international Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firm.